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In Maine, the insurer that has enrolled the most Obamacare customers isn’t the state’s well-established Blue Cross Blue Shield plan, owned by insurance giant WellPoint Inc. It’s WellPoint’s only rival: Maine Community Health Options, a startup that didn’t exist three years ago.

The newcomer, funded primarily by taxpayer money lent under the U.S. health-care law, has won about 80 percent of the market so far in Maine’s new insurance exchange, exceeding its own expectations, said Kevin Lewis, the chief executive officer.

Obamacare opponents predicted early on that insurance co-ops created by the law would fail, and that much of the $2.1 billion they were loaned to get started would be lost. Instead, the 23 co-ops that now exist nationally have enrolled about 300,000 people in health plans by combining low premiums with a certain homespun appeal, according to company executives.

Kristin Binns, a spokeswoman for Indianapolis-based WellPoint, declined to comment on her company’s co-op competition.

The 2010 Patient Protection and Affordable Care Act refers to these new companies as “Consumer Operated and Oriented Plans,” or co-ops. To be sure, not all of the new companies have thrived. Some, such as Maryland’s, have struggled to sign people up because of problems with their state’s exchange while others, including Michigan, have set their premiums too high.

Price leaders

The successful co-ops “emerged as price leaders,” responsible for more than a third of the lowest-premium plans offered on U.S. exchanges, according to an October report by the consulting firm McKinsey & Co.

Executives from these not-for-profit groups in part credit innovative benefit designs for their success, including features that offer free doctors’ visits and generic drugs, and even $100 gift cards for people who get an annual physical. In Wisconsin, many customers of Common Ground Healthcare Cooperative appreciate the company’s not-for-profit, member-governed business model, CEO Bob DeVita said.

“There’s a long-standing upper Midwest tradition with co-ops,” DeVita said. “I think there was a lot of pent-up demand for that.”

In Windsor Heights, Iowa, 35-year-old Geoffrey Wood, the chief operating officer of Startup Genome, said he signed on for the state’s co-op, CoOportunity Health, because he had grown tired of dealing with his previous insurer, Aetna Inc.’s subsidiary Coventry Health Care Inc.

‘New guy’

“Given the choice between them, as the incumbent company, and an innovative company trying to do something different, I didn’t feel like I had much choice,” Wood said. “I decided to give the new guy a shot.”

Cynthia Michener, an spokeswoman for Hartford, Conn.-based Aetna, said Coventry’s advantages for enrollees include experience with the Iowa health-care system and stability. She declined to discuss Wood’s case without authorization from him.

“Coventry Health Care has served Iowans for more than two decades, and knows the community and its health-care needs well,” Michener said in an e-mail. “We have long-standing experience of providing health insurance and benefits and helping members access care, and a track record of financial stability to pay claims.”

About 4 million Americans have signed up for private health plans using new marketplaces created by the law, the U.S. government says. The Congressional Budget Office projects 6 million will enroll this year, a reduction of 1 million from estimates before the troubled introduction of the law began in October.

Slow starts

It hasn’t been a smooth road for some of the co-ops. The computer bugs and errors that prevented many Americans from signing up for coverage in October and November took a toll and, in some states, the startups continue to struggle.

Co-ops in Maryland, Oregon and Massachusetts, for instance, haven’t hit their target enrollments because their state-run exchanges still aren’t functioning well. And Vermont’s co-op dissolved in September, returning its federal solvency loans, after state regulators denied it an insurance license, saying the company’s enrollment expectations were unrealistic and its proposed rates weren’t competitive.

“They’re finding their way to us off the exchange, fortunately,” Dawn Bonder, CEO of Oregon’s Health Republic Insurance, one of two co-ops in the state, said. She estimated the company signed up about 4 percent to 5 percent of customers using Oregon’s exchange, which had enrolled about 33,800 people by February, according to the U.S. government.

Opportunity ahead

“We’re looking at 2015 as an opportunity to just do what we hoped to do in 2014 -- but with a lot of experience under our belt,” she said.

At the same time, co-ops in Michigan and Tennessee haven’t grown at the rate of peers because they initially over-priced their plans relative to competitors, spokesmen for the companies said.

“2014 is preparation, really, for ’15,” said David Eich, a spokesman for Consumers Mutual, the Michigan co-op. “We’re going to be really engaged back on the individual market.” He said the company isn’t in danger of going out of business.

About 16 percent of the loans are for the co-ops’ start-up expenses, such as leasing office space and hiring staff, and must be repaid in five years. The rest is to be saved to meet state regulatory requirements for insurers’ financial reserves, and is due in 15 years.

Opponents remain

Some Republicans, meanwhile, still contend taxpayers remain at risk of losing much of the money loaned to the companies. At a Feb. 5 hearing on the co-ops, Rep. James Lankford of Oklahoma called the program “an investment disaster,” and said there remains “the possibility that American taxpayers will be left on the hook.”

Along with Maine, co-ops have attained large market share in New York, Iowa, Nebraska, Colorado, Kentucky, Wisconsin, South Carolina, Utah, Montana, Nevada and New Mexico, said John Morrison, a board member and founding president of the co-op trade group, and other executives.

New York’s co-op, Republic Insurance of New York, which was founded by the same organization, Freelancers Union, that started Bonder’s company in Oregon, is probably the largest in the country, with more than 50,000 members. It was second in market share to WellPoint’s Empire brand on the state’s exchange as of the end of December, according to data from the exchange, New York State of Health.

Planned expansion

Federal authorities have approved plans by the co-ops in Montana, Massachusetts and Kentucky to expand into neighboring states next year -- Idaho, New Hampshire and West Virginia, respectively. The companies have received a total of $113 million for their expansion plans, according to a government budget document published March 4.

For a handful of co-ops, success has raised a new concern. If they enroll many more customers than they expected, they could run afoul of state regulators who require companies to maintain cash reserves sufficient to cover medical claims in the event they go out of business. All the co-ops received multimillion dollar loans from the government to fund solvency reserves, and the size of each loan was based on projected enrollment.

The Iowa co-op, CoOportunity, which also serves Nebraska, has signed up about 54,000 members, after projecting it would enroll just 11,800 by the end of March, said Cliff Gold, the chief operations officer.

Solvency loans

“We do have concerns about the solvency loans if we continue to grow at this rate,” Gold said. The co-op was signing up as many as 1,000 people a week in February, he said.

The co-ops have lobbied the U.S. Centers for Medicare and Medicaid Services, which controls the loans, to make more money available for reserves. Congress capped spending on the co-ops as part of a budget deal in January 2013, leaving $253 million in a “contingency fund for oversight and assistance” to the firms, according to another budget document published March 4.

“While it’s still early, we are encouraged by what we have seen so far, and we will continue to work closely with these co- ops to monitor their progress and assess their performance,” a spokesman for the agency, Aaron Albright, said in an e-mail.

If the co-ops continue to grow, Obama administration officials have promised to support them, Morrison said. Morrison and co-op executives met with U.S. Health Secretary Kathleen Sebelius and other top administration health officials at the White House on Feb. 6 to brief them on their progress.

The officials told the companies that “if co-ops continue to perform well in the years ahead, the administration will look to expand the availability of co-ops into the remaining states that don’t currently have them,” Morrison said.

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